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Campaign for Budget Transparency

IMPROVING TRANSPARENCY, IMPROVING ACCOUNTABILITY—The ability to see how government collects and spends money is fundamental to a thriving, participatory democracy.

Let The Public Follow the Money

Public budgets are the most concrete expression of public values and priorities—articulated in dollars and cents. As states grapple with difficult decisions to make budgetary ends meet, opening the state checkbook to the public provides an important tool that allows both citizens and civil servants to make informed choices.

Unfortunately, too often public subsidies, tax breaks or special deals are granted to powerful corporate interests at the taxpayers’ expense. When this happens, Massachusetts residents are stuck with the tab, or public resources and services end up threatened.

Transparency in government spending checks corruption, promotes fiscal responsibility and allows for greater, more meaningful participation in our democratic system.

MASSPIRG is working to make all government spending and budgeting fully transparent, on an easy-to-use and comprehensive website.

While the Commonwealth has made significant improvements since we started our campaign in providing public access to state spending and revenue on the Transparency Massachusetts website, even earning an A in our Following the Money 2015 report, there is still more to do, including providing more budget information on all quasi-public agencies, tax expenditures, and municipalities, as well as access to all contracts.

Issue updates

We should be able to trust that the products we buy are safe — especially ones our families use every day, directly on our bodies. However, chemicals of concern are routinely found in many of our day-to-day personal care products, ranging from Dial bar soap to Suave kids’ shampoo, according to Massachusetts Public Interest Research Group Education Fund's investigation of common consumer products.

State governments spend hundreds of billions of dollars each year through contracts for goods and services, subsidies to encourage economic development, and other expenditures. Public accountability helps ensure that state funds are spent as wisely as possible.

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Tax loopholes encouraged more than 72 percent of Fortune 500 companies – including 8 companies head quartered in Massachusetts – to maintain subsidiaries in offshore tax havens as of 2014, according to “Offshore Shell Games,” released today by MASSPIRG Education Fund, and Citizens for Tax Justice. Collectively, the companies reported booking nearly $2 trillion offshore for tax purposes, with just 30 companies accounting for 65 percent of the total, or $1.35 trillion.

Today’s announcement by the U.S. Department of Justice of a proposed $20.8 billion out-of-court settlement with BP to resolve charges related to the Gulf Oil spill allows the corporation to write off $15.3 billion of the total payment as an ordinary cost of doing business tax deduction. The majority of the settlement is comprised of tax deductible natural resource damages payments, restoration, and reimbursement to government, with just $5.5 billion explicitly labeled a non-tax-deductible Clean Water Act penalty. This proposed settlement would allow BP to claim $5.35 billion as a tax windfall, significantly decreasing the public value of the agreement, and nearly offsetting the cost of the non-deductible penalty.

As summer arrives and hard-working Bay Staters stretch back on sandy shores, many of the corporations that do business here are also taking advantage of places like Bermuda and the Cayman Islands — to dodge their share of taxes. But last week a public hearing at the Statehouse discussed closing a key loophole that currently allows multinational companies to use offshore tax havens to avoid paying Massachusetts taxes.

As Tax Day approaches tomorrow, it’s a good time to be reminded of how ordinary taxpayers and specifically small businesses pick up the tab for offshore tax loopholes used by many large multinational corporations. MASSPIRG was joined today by Representatives Josh Cutler (D-Duxbury) and Lenny Mirra (R-West Newbury), Senator Mark Montigny (D-NewBedford) and Massachusetts Fair Share to release a new study by the MASSPIRG Education Fund revealing that the average Massachusetts small business owner would have to pay an extra $4,031 in state and federal taxes to make up for the money lost in 2014 due to offshore tax haven abuse by large multinational corporations and to call for the passage of a state bill to close one of the loopholes.

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U.S.-based multinational corporations are allowed to play by a different set of rules than small and domestic businesses or individuals when it comes to the tax code. Rather than paying their full share, many multinational corporations use accounting tricks to pretend for tax purposes that a substantial portion of their profits are generated in offshore tax havens, countries with minimal or no taxes where a company’s presence may be as little as a mailbox. Multinational corporations’ use of tax havens allows them to avoid an estimated $90 billion in federal income taxes each year.

U.S.-based multinational corporations are allowed to play by a different set of rules than small and domestic businesses or individuals when it comes to the tax code. Rather than paying their full share, many multinational corporations use accounting tricks to pretend for tax purposes that a substantial portion of their profits are generated in offshore tax havens, countries with minimal or no taxes where a company’s presence may be as little as a mailbox. Multinational corporations’ use of tax havens allows them to avoid an estimated $90 billion in federal income taxes each year.

Every year, corporations and wealthy individuals use complicated gimmicks to shift U.S. earnings to subsidiaries in offshore tax havens – countries with minimal or no taxes – in order to reduce their federal and state income tax liabilities by billions of dollars. While tax haven abusers benefit from America’s markets, public infrastructure, educated workforce, security and rule of law – all supported in one way or another by tax dollars – they continue to avoid paying for these benefits.

Every year, corporations and wealthy individuals use complicated gimmicks to shift U.S. earnings to subsidiaries in offshore tax havens – countries with minimal or no taxes – in order to reduce their federal and state income tax liabilities by billions of dollars. While tax haven abusers benefit from America’s markets, public infrastructure, educated workforce, security and rule of law – all supported in one way or another by tax dollars – they continue to avoid paying for these benefits.

Every year, state governments spend hundreds of billions of dollars through contracts for goods and services, subsidies to encourage economic development, and other expenditures. Accountability and public scrutiny are necessary to ensure that the public can trust that state funds are spent as well as possible.

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The Commonwealth should become a leader in budget transparency. Doing so will help rebuild the frayed public trust in government. It will help us make better choices together about investments in our community.

Whether you support raising or lowering the corporate tax rate, restoring the integrity of our tax system by closing gaps in the rules should not be held hostage to separate issues about the appropriate tax rate. Imagine the uproar if Barry Bonds had told Major League Baseball that he’d be willing to give up steroids if the home run fences were moved in far enough.